By Jason Watson (Google+) There are time limits for certain records and those will be discussed later, but there are some general reasons for creating a good recordkeeping system. Identify Sources of Income: This can seem silly since most taxpayers don’t want to prove additional income for...

By Jason Watson (Google+) Receipts and recordkeeping are common concerns. It is your responsibility to prove your expense- in the absence of proof, the IRS and the Tax Court will allow some estimation but it is weighed heavily against the taxpayer. Here’s the skinny: you need a record...

By Jason Watson (Google+) There are several acceptable IRS techniques for maintaining your records. Each has its advantages, and you might find success in using a mixture depending on your needs and your attention to detail. Separate Credit Card: If you use a separate credit card for your tax...

By Jason Watson (Google+) Mileage is one of the most often deducted expense, and therefore it is one of the most scrutinized records. First, you need to prove you own the vehicle(s). Next, you need to keep track of your beginning and ending odometer readings. It is a good idea to make copies of...

By Jason Watson (Google+) Ah, the question of the century. Receipts, Proof of Payments: These should be kept for 3 years after the filing of your tax return. This coincides with the IRS’s statute of limitations for examination. However, if you file a fraudulent tax return or do not file a...

By Jason Watson (Google+) For incomes up to $200,000 your audit risk is 1%. From $200,000 to $1 million, it jumps up to 4%, and over $1 million the audit rate is around 12%. For those taxpayers in the 1% audit risk bracket, 77% of the audits performed are done by mail. This means the IRS...